Business Capital, LLC v Lazar

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Business Capital, LLC v Lazar 2018 NY Slip Op 31489(U) July 3, 2018 Supreme Court, New York County Docket Number: 652252/2018 Judge: Debra A. James Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: NEW YORK COUNTY CLERK 07/05/2018 02:19 PM 1] INDEX NO. 652252/2018 NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 07/05/2018 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: PART HON. DEBRA A. JAMES IAS MOTION 59EFM Justice · - - - - ·----·-------------- ·-----X 652252/2018 INDEX NO. BUSINESS CAPITAL, LLC, COMMONWEALTH MERCHANT ADVANCE, INC., . 07/03/2 Plaintiffs, MOTION DATE -vABRAHAM LAZAR, ADVANCED CAPITAL VENTURES LLC, ADVANCE CAPITAL USA LLC, BLACKRIVER CAPITAL LLC, JOHN DOES, 018 MOTION SEQ. NO. - - - - - 001 DECISION AND ORDER Defendants. The following e-filed documents, listed by NYSCEF document number (Motion 001) 10, 11, 12, 13, 14, 15, 16, 17, 18, 19,20,21,22,23,24,25,30,31,32,33,35,36,37,38,39,40,41,42,43 were read on this motion for PREL INJUNCTION/TEMP REST ORDR ORDER It appearing to this Court that a cause of action exists in favor of the plaintiffs and against the defendants and that the plaintiffs are entitled to a preliminary injunction on the ground that the plaintiffs have demanded and would be entitled to a judgment restraining the defendant Lazar from the commission or continuance of an act, which, if committed or continued during the pendency of the action, w6uld produce injury to the plaintiffs, as set forth in the aforesaid decision, it is ORDERED that such preliminary injunction shall be effective upon the posting of an undertaking to be fixed, hearing, in the sum of $ the plaintiff, ------------- upon a further conditioned that if it is finally determined that they were not 85225212018 BUSINESS CAPITAL, LLC vs. LAZAR, ABRAHAM E. MoUon No. 001 1 of 5 Page 1of5 [*FILED: NEW YORK COUNTY CLERK 07/05/2018 02:19 PM 2] INDEX NO. 652252/2018 NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 07/05/2018 entitled to an injunction, will pay to the defendant all damages and costs which may be sustained by reason of this injunction; and it is further ORDERED that defendant Lazar, his agents, servants, employees and all other persons acting under the jurisdiction, and/or direction of such defendant, . . supervision are enjoined and restrained, during the pendency of this action, from doing or suffering to be done, directly or through any attorney, agent, servant, employee or other person under the supervision or control of defendant or otherwise, any soliciting, of the following or referring, enjoined acts: from calling, entering any cash advance transactions with any customers or independent sales off ices with whom he had a relationship during his employment with plaintiffs; and it is further ORDERED that the application of plaintiffs seeking other provisional relief is denied; and it is further ORDERED that the temporary restraining order is vacated; and it is further ORDERED that counsel are directed to appear for a hearing to fix an undertaking in Room 331, 60 Centre Street, New York, New York on July 18, 2018, at 11:00 AM. DECISION BOO Seidman v Hirshberg, 93 NY2d 382 (1999) is the seminal case that sets forth the standards for determining the validity 652~52/2018 BUSINESS CAPITAL, LLC vs. LAZAR, ABRAHAM E. Motion No. 001 2 of 5 Page 2 of 5 [*FILED: NEW YORK COUNTY CLERK 07/05/2018 02:19 PM 3] INDEX NO. 652252/2018 NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 07/05/2018 of an employment anti-competitive agreement. The court in Seidman applied a three-prong test to evaluate whether a restraint in such contract is reasonable, which is that: "it (1) is no greater than required for the protection of the legitimate business interest of the employer; hardship on the employee and (3) (2) does not impose undue is not injurious to the public. Seidman also held that New York courts give greater weight to the interest of agreements between and among professionals in I restricting competition within a confined geographical area. The Non-Solicit and Confidentiality Agreement at bar (the Agreement) is that of a merchant cash advance business. Since such business does not involve a learned profession, the interests of the employer plaintiffs are not entitled to the weight that would be given to those of a company of accountants or physicians, for example. Irrespective of the nature of the business, plaintiffs have not demonstrated a likelihood of success on the merits of its action for breach of certain terms of the Agreement. There is no dispute that defendant Lazar worked as a sales agent for plaintiffs for all of eight months and entered into the Agreement as condition of such. contract of employment. Under Seidman, the imposition of such condition as a condition of initial employment, as opposed to promotion to a position of more responsibility, suggests overreaching and coercive use of 65225212018 BUSINESS CAPITAL, LLC vs. LAZAR, ABRAHAM E · Motion No. 001 3 of 5 Page 3 of 5 [*FILED: NEW YORK COUNTY CLERK 07/05/2018 02:19 PM 4] INDEX NO. 652252/2018 NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 07/05/2018 dominant bargaining power by plaintiffs. Seidman, supra, at 395. Further some of the restriction are overbroad, i.e. , I greater than necessary to protect plaintiffs' legitimate interests. Specifically, the Agreement restricts defendant Lazar from soliciting independent sales offices (ISOs), whether they were referred by him or not, i.e., the restriction extends to ISOs with whom he never acquired a relationship during his employment. Seidman, supra, at 393. The facts of this case are distinguishable from those in Ashland Management Inc. v Altair Investments, NA, LLC, 59 AD3d 97, 100 (l 5 t Dept. 2008), where plaintiffs brought forth evidence that on at least 40 occasions after leaving its employ, defendants used plaintiff's Federal Express account to send packages of information to plaintiff's clients for the purposes of soliciting business on behalf of the new entity that defendants formed. However, the court severs and finds that plaintiffs are likely to succeed on restrictions related to merchants and ISOs with whom defendant Lazar developed a relationship while in the employment of plaintiffs, as plaintiffs have established that defendant Lazar violated such restriction when he solicited plaintiffs' merchants and used ISOs in his new business, with whom he interacted when in plaintiffs' employment. In making such solicitations, it had at the ready its own website, that 6.52252/2018 BUSINESS CAPITAL, LLC vs. LAZAR, ABRAHAM E. Motion No. 001 4 of 5 Page 4 of 5 [*FILED: NEW YORK COUNTY CLERK 07/05/2018 02:19 PM 5] INDEX NO. 652252/2018 NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 07/05/2018 copied verbatim the exact same content that appears on plaintiffs' website. Plaintiffs have a legitimate business interes·t in "protection against defendant's competitive use of client relationships which [plaintiffs] enabled him to acquire through his performance of [sales agent] services for the [plaintiffs'] clientele during the course of his employment." Seidman, supra, at 392. 7/3/2018 DATE CHECK ONE: CASE DISPOSED GRANTED D X DENIED NON-FINAL DISPOSITION x GRANTED IN PART APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT 65225212018 BUSINESS CAPITAL, LLC vs. LAZAR, ABRAHAM E · Motion No. 001 5 of 5 D D OTHER REFERENCE Page 5 of 5

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